The ABS conducted a survey of businesses in the private sector to gauge innovation undertaken during the period January 2001 to December 2003. For the purposes of the survey, innovation is defined as the process of introducing new or significantly improved goods or services and/or implementing new or significantly improved processes. New goods or services or processes may involve the development of new technology, an adaptation of existing technology to a new use, or may be non-technological in nature (e.g. organisational and managerial change). These categories are defined as:

a new good or service means any new good or service or combination of these which is new to a business; its characteristics or intended uses differ significantly from those previously produced

a new operational process means a significant change for a business in its methods of producing or delivering goods or services

a new organisational/managerial process means a significant change to the strategies, structures or routines of the business which aim to improve performance.

During the three years ended December 2003, innovation was undertaken by 35% of businesses in scope of the survey. Of those businesses innovating, a higher proportion (23%) implemented new or significantly improved operational processes than introduced new or significantly improved goods or services (17%) (table 25.1).

Proportion of businesses which introduced/
implemented new or significantly improved

Indicator

As a
December
2003

Innovating(b)

Goods or
services(b)

Operational processes(b)

Organisational/
managerial
processes(b)

no.

no.

%

%

%

%

Employment size

5-19 persons

102,009

31,036

30.4

14.3

19.8

17.7

20-99 persons

28,583

13,061

45.7

20.6

29.9

31.3

100 or more persons

5,244

3,186

60.8

38.4

44.8

39.5

Income size

Less than $100,000

9,160

^1,251

13.7

**3.8

*10.1

*9.7

$100,000 - less than $1m

51,902

12,749

^24.6

^10.6

^15.1

^12.8

$1m - less than $5m

52,257

21,686

41.5

20.5

28.3

27.1

$5m or more

22,517

11,596

51.5

26.3

33.7

32.9

States and territories

New South Wales

48,279

17,586

36.4

^17.8

^23.0

^20.9

Victoria

34,807

12,070

34.7

^17.1

^22.8

^21.1

Queensland

24,519

7,519

30.7

^14.0

^21.7

^20.6

South Australia

8,802

4,038

45.9

^23.8

^30.2

^29.8

Western Australia

13,416

4,399

32.8

^13.6

^22.2

^21.3

Tasmania

2,553

676

^26.5

*10.1

*17.5

^17.0

Northern Territory

1,121

315

^28.1

*11.5

^15.4

*17.9

Australian Capital Territory

2,339

680

^29.0

*9.2

*22.1

^20.6

Region

Capital cities

95,426

33,540

35.1

17.6

^21.9

^22.2

Other areas

40,409

13,742

34.0

14.1

25.3

19.4

Industry

Mining

722

223

^30.9

^10.6

^18.5

^17.9

Manufacturing

18,940

8,621

45.5

27.1

29.7

24.2

Electricity, gas and water supply

191

97

50.8

21.2

33.5

34.9

Construction

12,554

3,860

^30.7

^9.8

^20.0

^22.4

Wholesale trade

13,231

5,670

42.9

^26.1

^25.2

^27.1

Retail trade

30,163

9,471

^31.4

^10.2

^21.6

^18.4

Accommodation, cafes and restaurants

11,980

3,175

^26.5

^10.6

^17.8

^16.1

Transport and storage

5,008

1,748

34.9

^15.4

^25.8

^21.3

Communication services

428

219

^51.1

^29.2

^40.0

^30.4

Finance and insurance

3,821

1,694

^44.3

^22.2

^26.4

^31.7

Property and business services

34,368

10,880

^31.7

^16.6

^21.6

^20.1

Cultural and recreational services

4,429

1,625

36.7

^17.9

^20.2

^25.4

Total

135,836

47,283

34.8

16.6

22.9

21.4

(a) The scope of the survey excluded all businesses employing less than five employees and those classified to the following industry Divisions of ANZSIC: Agriculture, forestry and fishing; Government administration and defence; Education; Health and community services; and Personal and other services.(b) Proportions are of businesses reporting innovation in each category.